>> know when at this point, analysts -- no one at this point, analysts, companies, have a great sense of what conditions will be in 20202021. >> let financial markets take care of themselves. >> we are going to be in a slow growth world for a very long time. >> "bloomberg surveillance "bloomberg surveillance this is -- this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. it is a friday in june. for many in this nation, it is juneteenth, as we look to

galveston in 1865, or maybe tulsa this weekend the president. the bolton papers a distraction in washington. around that, we continue to look at economics, finance, and investment. we have a terrific guest in a moment. to frame all of this is the interest rate market. i loved what you said in our previous hour about the continued confusion. i am also trading this june 19 -- like it is the end of the have, june 30. jonathan: it has been really confusing over what is happening with the united states and china, especially when you throw what is happened with trade. we need to see it in the data. that is my point of view at the moment. let's see if it comes through in the data.

phase i actually looks like we achieve something. of: delete august mood, course, just the amount of business being done in equities. lisa abramowicz, you see that in the bond market. what is the distinction you see in the quiet and full faith and credit? lisa: this has been the story for the year, suppressing the borrowing cost for both themselves, the nation, as well as for companies. this has led to the risk on feel. i am trying to get a handle on how much this is contributing to the glass half empty sentiment that jon was talking about. the fact that we are seeing pacescounts pick up and like texas, and arizona, and the market shrugs it off and look forward. at theam going to look glass half-full. we just spoke to the lieutenant governor, opening in new york on

monday. baseball can't do it. american football can't do it. you and i will observe the tots playing a team from up north this afternoon. let's go jerry and the pacemakers. there's a small liverpool game coming up as well. tom, i'm so impressed. our next guest is so excited about this that he would rather talk about his beloved liverpool then he would the bond market. that is the state of affairs at the moment at jp morgan. tom: it is, absolutely. but spring in bob michele. this is somewhat -- let's bring in bob michele. this is someone we know so well on "the real yield." look for that coming up on bloomberg television. [laughter] bob michele, when do i get a real yield back? bob: i know. it just seems to have been another one of these casualties of the crisis.

i guess we will know things are further returning to normal when it comes back because by then, all the value will have been squeezed out of the bond market. jonathan: you sound like you've become more constructive in the last couple of weeks. can you walk us through whether you have, and why? bob: for sure, we have. when you look at the over woman response by policymakers, both monetary and on the fiscal side, it has been dramatic. it has not just been a handful of developed markets. it has been in the emerging markets. in the last couple of days, you had rate cuts out of indonesia, a rate cut out of brazil. you had a rate cut out of russia. i look at where brazil central bank rates are. they are 2.25%. that is where the u.s. was a year ago. so the policymakers have no interest in watching the

pandemic continue to shut down the global economy. they are doing everything they can. jonathan: is this a case of there is no alternative, and the assets that used to get a return aren't there anymore? or is this something more constructive than that? bob: it is a combination of both. i love torsten. i was a little disappointed that in his list of zombies, he didn't list the bond market because that is where we are headed. central banks are going to control the level of funding across the system, and it is not just front rates, with yield curve control and unlimited amounts of quantitative ease. they can go across the curve and control the funding rate to their government, and then with purchases of credit, they are controlling the funding rate to the corporate world as well, and in the u.s., you are also seeing it with households through talk

programs and other things. there is a commitment to bring rates down ultralow across the system until we close the output gap, and that is years away. lisa: what is the playbook for investing in a zombie world, both bonds as well as households and companies? bob: i think last time i was on, i said i am sure tom has his samuelson lying around, and i'm sure one of the laws in their was don't fight the fed. i am not fighting the central banks or policymakers in aggregate. rates are coming down. they have come down a lot. they are going to stay low for a while. we aren't going to see acceleration in growth, but until that acceleration materially closes the output gap and you start to see any inflationary pressure, you are not going to see any talk of raising rates. i think what you do is you

continue to extend out into credit, and you find companies and borrowers that can operate in a world and in an economy that is running at a fraction of what used to. tom: this is critically important. ,ou mentioned paul samuelson 1948. it was a different economy. it was a different america. the belief out there is your world is gains to the elite. how do we have our finance system give us gains that paul samuelson saw through the 1950's and into the 1960's for the good of society? is one of the effects of the overwhelming monetary response. the initial reaction is to inflate asset prices, and of course, the holders of assets are in the upper echelon of the

economy. it could widen the gap between the haves and the have-nots. i don't know that monetary officials could or should have done anything better. as i said in the past, i think they should start shifting the narrative. you are seeing that out of christine lagarde and the ecb, which is, what do you want us to do? we are not the first policy response. we are the second policy response. the first policy response was for government officials to shut down the economy. we responded by lowering rates and creating liquidity and funding for the system. so we now have brought rates down to a level where public and private borrowers can do something with it as they recover. let's see what they do with it. focus your attention there. our company's going to borrow and buy back shares and raise dividends and make acquisitions?

or are they going to invest in capex? how about on the government side? are we going to pileup the deficit, or are we going to actually invest in health care and infrastructure? so i think the narrative needs to change a bit here. lisa: perhaps the narrative needs to also change around the expected returns profile at a time when you've got a lot of pensions still shooting for that 7% bogey. what is an appropriate bogey right now, given the interest rate environment, given the strategy you were just talking companies thatg can maneuver in a low growth world? bob: you are right, there are pension funds and insurance companies that have long dated liabilities they have to match. what has been interesting to me is the fed support of the curve has been in the front end, somewhat in the intermediate part of the curve, but they are dialing back their purchases in the long and. so we are seeing three curves

evolve, and the long end looks as if it is being left to pension funds and insurance companies to negotiate the raid with some of the borrowers in the market, so long credit. i don't know that you will get 7.5% there. i think you are going to be lucky to be able to book in the time.a for an ongoing i think that forces you to accept that everyone is committed to a recovery. other markets will continue to appreciate, and this isn't the proper environment to de-risk in. so continue to hold the things that have a bit more upside, whether it is equities or privates or alternatives, and of course, that means an implicit faith that policymakers will continue to get it right. jonathan: let's end with the important stuff. 60 seconds left.

can we get a score this weekend for liverpool? bob: do you realize that premier league football has shut down, but the bond market has continued to operate? now, i am a buyer of both of those markets. [laughter] the anticipation has been mouthwatering for me. i am expecting 3-0 liverpool. jonathan: bob michele, always appreciate it. liverpool, the energy comes up a bit? tom: i got teary-eyed. nil means zero, like shut out. [laughter] jonathan: i think most people understand that, tom, to be honest with you. bob michele of jp morgan, always fantastic to catch up with you. this is going to go on for the next couple of months. from new york city this morning, good morning to you all. onity futures up 39 points

the s&p. i've established a technique with tom keene. he talks, and you just keep talking past him. up next, the mayor of london, sadiq khan. tom: what are you, my fourth wife? ritika: with the first word news, i'm ritika gupta. pompeory of state mike is denouncing former national security as a "traitor who has damaged america." he says he has not read the tell-all book that was sharply critical of president trump, but says from the excerpts he has seen published, bolton is spreading lies and half-truths. debate on are opening a recovery program. the eu plan would be financed by joint debt issuance. that is seen as acing for can step towards economic integration.

be onery country wants to the hook for spending another countries. senator amy klobuchar has taken herself out of the race to be joe biden's running mate. she says the democratic nominee should select a woman of color. a tough on record as crime prosecutor in minneapolis has stirred controversy. on austin,roing in texas as its second location for a u.s. factory. tesla says wherever it is built, the factory will eventually employ 5000 workers. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> people still are trying to figure out what to do with the second half of the year, let alone make big shifts that will affect multiyear horizons.

i will expect people to continue to ride the risk wave a little bit. jonathan: kate moore of blackrock on writing the risk wave. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. we are live on bloomberg tv and bloomberg radio. this is "bloomberg surveillance ." in your equity market, positive and the s&p 500 come up by a little more than 1%. the headlines out of europe getting some attention. this coming from the eu leaders summit. it ends without consensus on a recovery plan. that is not going to surprise anybody, including this fx market. no big moves on the single currency off the back of this headline. tom: what does that signify to you? jonathan: i just think the negotiations continue. i did not expect anything to happen today either. this was really the formal start have a conversation about getting the so-called frugal

four to come together with the rest and do more. i have to be honest with you, it is going to be really difficult. wherever there is compromise, there is often suboptimal outcomes, and europe has shown often that that is what it is vulnerable to doing. tom: absolutely. no question about that. this is the way it works. you put out a book, and then you get blurbs. i've done blurbs, and there's other blurbs, but one of the hardest blurbs to earn is the good dr. wolf, martin wolf of "the financial times." it is another short, concise book on china, and that is by our tom orlik, chief economist at bloomberg, with decades of experience on china. to work off what martin wolf says about your important book, it goes on and on because of

leverage. how leveraged is china as they confront president trump's washington? tom o: china took on a huge amount of debt in its response to the financial crisis, and that ran to strong for too long. that has left them with debt that is a huge burden, huge risk , especially facing the covid crisis, the trade war. the big thesis in my book is, yes, the risk is there, but china's policymakers have unrecognized resources which they can use to manage it. jonathan: what is the trade-off here, as they secure that short-term stability? what are they sacrificing in the long-term? tom o: the difference between china and most other governments in the world is that china is uniquely prepared to put the government balance sheet to work to support corporate's, to support markets, ultimately to

support financial stability. what that means is that a bet on china fundamentally is a bet on china's government ability to step in. a lot of people think that china's government might run out of steam, might run out of bullets in the next year or two. trade war, covid. there's a lot of stress they face. my view is that china's development story still has a long way to run. yes, government intervention creates distortions, but that is not going to knock over the apple card. -- the apple cart. jonathan: some people might be listening --lisa: some people might be listening to this and say, how is china any different with the thumb on the scales and leverage increasing on the system? tom o: i think that is complete rewrite. i don't want to sound too pollyanna about what is going on in china. clearly, there are huge

distortions in the market the come from government intervention come about as the u.s., europe, japan increasingly find that in these waves of crises, the central bank, the ministry of finance needs to wade in to prevent systemic risk, to keep growth going, what is happening now is not china moving close to the western model of free markets. in some senses, it is the rest of the world moving closer to china's model of extreme and sustained intervention. jonathan: that is what i wanted to come to you on. there was a belief that the system in china needed to evolve. do you just see it as a well oiled machine now that everyone else tries to replicate? tom o: i think we need to distinguish between the politics and the finance and economics. on the politics, clearly the progress which many one to do see towards a more western, more democrat system just isn't there. on some aspects of the economy,

for example, state ownership, there hasn't been the progress many people think is necessary. but on the finance, on the markets, actually the pboc keeps the dial pointed towards reform. so we now have interest rates which are liberalized. we have an exchange rate which is liberalized. we have a more open capital account. these things, because of the way the finance and liberalization drivesfinancial system gains in deficiency everywhere else, these games are really important for sustaining china's medium-term prospects. tom k: tom orlik, i think our viewers and listeners in this simulcast have a good understanding of different figures. the president, the secretary of state, perhaps the secretary of treasury. but i think to too many, mr. lighthizer is an enigma. how do the chinese perceive the leader of our trade initiative? tom o: i think that is a really

great question, tom. i think one of the striking things about the last three or four years is the way in which robert lighthizer has transitioned from this kind of voice crying out in the wilderness, this guy who refused or sit china shouldn't come into the wto back in 2001, to a really central figure whose view is really shaping u.s.-china relations, shaping views on how the wto should be operating, so i am sure the chinese see lighthizer is a very tough negotiator. i am sure they see someone who is kind of master of the procedures, but i think they also see someone who is really reshaping the perception of global trade and u.s.-china trade in a way which isn't very helpful for beijing. jonathan: highly respected and highly regarded, as well. quickly, let's pretend we are not on air. this is a really bold title for a book. what is it about the title that

makes you just a little bit nervous? what is the one thing that makes this theory slightly vulnerable? "china, theook is bubble that never pops." when i was a younger man, i used to smoke cigarettes and catch buses. i always knew if a lit -- if i lit a cigarette, the bus was guaranteed to arrive before i smoked it. i am slightly concerned the bubble is going to pop before i see any royalties. fingers crossed, that is not going to happen. i know "surveillance" listeners are rushing out to buy it right now. jonathan: i'm sure they are. good luck to tom orlik, the author of the new book, "china, the bubble that never pops." from new york this morning, good morning to you worldwide. alongside tom keene, i'm jonathan ferro, together with lisa abramowicz. elevated, up by more than 1% this morning.

we advance as we look to add some weight to our weekly gain on u.s. equities. from new york, this is "bloomberg surveillance." ♪

jonathan: from new york city, this is "bloomberg surveillance." we are live on bloomberg tv and bloomberg radio. keene, i'mom jonathan ferro together with lisa abramowicz. equity futures elevated, just off session highs. in your bond market, a quick process at check. 10-year treasury yield's higher, her steeper, up two basis points. in foreign-exchange, keep an eye on the euro. europe advancing .2% even as the eu leader summit ends without consensus on the recovery plan. the message clear -- we will see you in person in july. i want to look at crude because i know you are looking at this. barrel, through $40 a

up 3.3% on the session. tom: i will defer to the experts , mr. curry at goldman sachs, mr. morse at citigroup. that is extremely constructive to correlate that. here is the dirty secret. we do this as we migrate through our friday morning. lisa abramowicz had it temper tantrum and said we need to do more on credit. jonathan ferro climbed on board the bandwagon and said we have to do more on credit because i miss the real yield so much. we have done a lot on credit. we finished strong with gershon distenfeld. we are thrilled he can join us on the credit. i look at the institutional perspective you have and it comes down to something simple. are you clipping coupons?

is there any total return, or even as this all about not losing money? what does it forward for the next year? gershon: it is important to remember when it comes down to it at the end of the day, credit is about clipping coupons. over the long term, if you put the coupon and you get your money back, that is a good result. he did not look for huge total returns -- you do not look for huge total returns. the only way you get returns is if you have a proceeding time where you have big losses. in 2008, you had the huge capital losses, followed by 2009. he got a first quarter where you at a huge downturn and you just have a huge recovery. we are back to a more coupon clipping environment. that is the normal environment for credit. 70% 80% of the time you clip your coupons. occasionally you have a big selloff.

typically that is followed by a big rally. everything was panicked in march. history tells you when you have a selloff you want to buy. now we are back to a more normal environment. jonathan: what is the message? if you buy high-yield hold to maturity? gershon: that is the message. we have talked about this before. while yield is a terrible predictor -- every time someone says what is my return for next six to 12 months, look at your yield -- it almost never works out that way. it is almost always a lot more or a lot less. if you look at the yield versus the next five-year return, and this goes back 40 years, it is striking. it is almost spot on. whatever you're starting yield is, that tends to correlate exceedingly high with your next five years return. jonathan: what about leverage levels? do they matter in this world right now?

leverage levels matter, but it is hard. it depends on where you are in a cycle. how cyclical the industry is. leverage levels are higher than normal. that does matter, but a lot of that is priced in. you look at the average yield of the market. over 6%. it is all over the place. companies have less leverage or have higher leverage because they are less cyclical, all things being equal you trade at much lower yields and those that have problems are priced that way. i do not know that the overall leverage is that big a deal. there is excess leverage to the investment-grade market and that could be somewhat problematic for some of the bbb part of the market. that will continue to be a good thing for the high-yield market, despite what is presented in the financial media. fallen angels are great thing

for the high-yield market. there is no such thing as the high-yield market being overwhelmed by then. time and time again that presents an opportunity as you have sellers who have to sell at any price. all else being equal, that becomes a great opportunity for high-yield investors. lisa: if this is the coupon clipping world and risk is yriced in, why not just but ccc's? gershon: if it was simple as you have a bunch of bonds trading at par with 11.5% coupons that have minimal default risk, that would be a strategy. unfortunately, you are not really buying that. you are buying a bunch of bonds that have lower yields than that. you are also buying bonds that have 20% yields but they do not really have 20% yields because a lot of those bonds are priced as if they have significant default

probabilities. many of them will default if you will not realize the deals. it is not as simple as saying you will get your 11% yield if you buy those bonds. you have a significant loss rate. it is not as if everything is completely clear in the high-yield market. you will have a loss rate associated with buying high-yield and the reality is the lower you go down, the higher the loss rate will be. lisa: what about leverage loans? aboutis concern concentration in industries hard-hit by the pandemic along with a lack of investor protectors and leveraged ratios than might be may higher -- how they do you think the loss rates will be? -- how big do you think the loss rates will be? gershon: i do not think they will be astronomical. it is hard to remember, but up until a couple of years ago the thesis was rates will only go in

one direction, and it is the opposite direction of what we have experienced. rates are going up. people piled money into that market because they thought the floating rate element would protect them. we wrote at length about how that was a bad thesis, even if rates did go up. a lot of issuance got bought in that market and a lot of poor issuance got done. more leverage got put in that market than had historically been. historically when something went bad in the loan market, he still got $.70 or $.80 back on the dollar. you are already seeing when something goes bad now, you're getting lower recoveries. none anywhere near the high-yield, but lower than the $.70 or $.80 you've got. loss rates will be higher. it is not necessarily disastrous , but worse relative to history. investors have to acknowledge that. the real difference is the

demand. loans did so well relative to the previous year. this year you have seen something like 30 billion into high-yield and $20 billion out of loans. that is making a huge impact on the market. high-yield,om the there is a thing called investment-grade. most of the yields are under .5%. we priced them over treasuries as well. i look at those screens on the bloomberg and all i can say is every cfo out there has to leverage up or decked up to debt up.- or e the money is free. are we going to see more of this? gershon: i do not see why we would not. ceoou are a cfo today or a and you do not believe you can irr a project with an

greater than the capital, what does that say about your outlook for your business? i think we are going to continue to see a lot more of that. jonathan: that is important. i have to jump in and ask this question. many people in this bond market think the c-suite will start doing heavy lifting for the bondholders. they come out this pandemic with a huge pile of debt and they need to work through it. are you saying is back to usual and back to normal pretty quickly? gershon: you tell me. how many times in history have markets come out with the great awakening and change their behavior? i will give you a simple example we saw. at the very beginning, at the end of march, when we were in crisis, the cruise operators, they had no revenue. they had to come up with the financing. investors had all of the leverage.

they were able to get a tremendous amount of security, able to get confidence that essentially -- covenants investors had not been able get for years or decades. how long did that last? a weaker two. then all of the momentum switch back to the issuers. until proven otherwise, people have short memories. different,time is but i think there's a long history that says we will be -- we already are back to business as normal and we will be for the for siebel future. jonathan: you are a realist and we always -- for the foreseeable future. you are a realist and we always appreciate that. gershon distenfeld. a question of how the c-suite behaves for months and years after the pandemic. tom: i do not give my opinion. i think we get back to business as usual quick. chairman powell has made it a

free lunch for corporate america. jonathan: the last thing i would call you is subtle. you might say you do not give your opinion but i think we get it loud and clear. , it is five and a half hours. i'm having trouble concentrating. jonathan: i am sure you are. take a breather. have a coffee or a beverage of your choice. keene, i amm together with lisa abramowicz counting you down to the opening bell. equity futures up. we advance one point 2% on the s&p 500. that is the market action. we need to talk about the social unrest and reopening some of the biggest cities on the planet. up next, looking forward to a conversation with the mayor of london, sadiq khan. that is next on "bloomberg surveillance." we are live on bloomberg tv and

bloomberg radio. with the first word news, i am ritika gupta. it looks like the trade deal between the u.s. and china is back on track. bloomberg has learned china plans to speed up purchases of u.s. farm goods under phase one of the agreement. the shopping list includes everything from soybeans to corn and ethanol china's purchases fell behind due to destruction from the coronavirus. more states are seeing growing numbers of coronavirus infections. florida, texas, and california reporting one-day records. meanwhile californians will not be required to wear masks in most situations outside the home that is from guidelines issued by gavin newsom. earlier, orange county california rescinded its mask quarter after its top health official received death threats. the trump administration goes to court to try to stop the publication of john bolton's tell-all book. it is a last-ditch effort.

the book is said to be released next week and ask her to have already appeared in newspapers. the justice department argues the book contains classified information. john bolton says the government is trying to stifle free speech. in australia, scott is warning of a cyberattack. health andys education and various industries have been targeted. he did not reveal the source of the attack, but claims they are state based actors. in germany the ceo of payment firm wire part has quit after it was disclosed to $.1 billion have disappeared. the resignation was affected immediately. two asian banks supposed to be holding the missing money say they do not have any relationship with wirecard. shares of wirecard were down more than half today. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am ritika gupta. this is bloomberg. ♪

>> have to stay in the game. the point get to where we may have a vaccine and

people make a back to traveling the way they have in the past. jonathan: robert crandall, former american airlines ceo. a fantastic lineup of guests weighing in on the pandemic on bloomberg tv and bloomberg radio. this is bloomberg surveillance. alongside tom keene i am jonathan ferro together with lisa abramowicz. , ih equity futures elevated will be catching up with mohamed el-erian of bloomberg opinion as we count down to the opening bell on bloomberg tv. tom: it has been a great set of conversation this week, including mr. crandall at mohamed el-erian. we have also looked at the politics of the moment and wrapped it into this horrific pandemic. we finish strong for the week, or for this hour with the mayor of london. siddique khan is some -- sadiq khan is someone we have spoken to many times. what he knows is the u.k.

celebrate something america cannot do, which is the return of premier league football. his beloved liverpool will go out in the field, no doubt with pay cuts involved for all of the players. it is so grim in his london mayor has taken a pay cut to signify to the united kingdom the urgent need for revenues. it is a story for america as well. thank you so much for joining us today. how urgent is it that prime minister johnson assist your city? mayor khan: it is important. it's a pleasure to join you and lisa. it is really important. governments across the globe including my country understand recession we are facing could turn into a depression. that is why we need an active industrial strategy as we come out of lockdown. although the government has been pretty good in helping businesses in relation to staff being furloughed, they have been

pretty good in the short term, they need to realize that as businesses come out of the lockdown, they need additional assistance as well. i will give you two examples. many public authorities have lost their tax bases from people who used to pay council tax. also businesses who used to pay business rates have stopped paying business rates because businesses have been incubated for the last three months. that means governments have not the funds to provide services. i have led by example, taking a pay cut. we need the government to step in for the long term. these are municipal governments. i think governments across the globe will have to do this. fall --m reading will bookhall, this magisterial

, and it is the spirit of london in the trading environment of the 16th century. tell us about the need to reopen trade to london in goods and services. how critical is it to get the euro star backup, how critical is it to get the airlines up and running? mayor khan: one of the reasons. i know you are speaking to me from new york. london is the greatest city in the world. it is because of the people who come to our city. the students, the tourist, the investors, the businesses, the sports fan. that stopped over the last four months. we need that to return. i am very concerned about the new academic year. many undergraduates may not come. i am concerned that those were multinationals may be risk adverse. i am concerned some of our world leading theaters, which have

been closed for the last four months may not reopen until next year. we know the world is a smaller place. globalization has some disadvantages but many disadvantages. it is important -- we safely open our doors to visitors and businesses and investors because we want to return to not business as usual, but a new normality. we recognized that what this pandemic has done it shine a spotlight on the fragility of our society and our business model, and we need to make sure the new normal addresses those issues. i will say khan, jonathan ferro reminds us of the preeminence of london on a regular basis. i wonder going forward about some of the social unrest we are seeing around the world with black lives matter protests in

london that have been ongoing. i wonder how this complicates issues. you've been calling for more police at a time with lower budgets and a time with increasing pressure on that presence. how do you go forward? mayor khan: i am not sure your american viewers realize this, but in britain people love george floyd. it did not just happen impact in , it a soda -- in minnesota had an impact around the world. if you're a black londoner you can relate to the awful way george floyd was killed. although i fully support the black lives matter movement, my pandemic asking people to keep their social distance, we are asking people to stay at home. what they should not be doing is protesting, as they are allowed to do, because that may lead to the virus spreading.

separately, this is highlighting that even london, the most progressive city in the world, there is racism against black people, discrimination against black people come inequality faced by black people. those of us in positions of power cannot be tone deaf to that, understand that, and also take steps to address that. this is a movement we would kick ourselves if we do not take steps to address the structural racism around the world in 2020 against black people. tom: too much to talk about. we truly look forward to seeing you when we revisit london soon. sadiq khan, the mayor of the city of london. an extraordinary week of conversations. i know we will drive forward the conversation. jonathan coming up with mohamed el-erian as well. what is extraordinary to me is to see the city open up. a second tranche opening on monday. that has to be a constructive sign.

lisa: it absolutely is. there is a question of how many people will come back. ine seen estimates that phase two new york city is expecting 150,000 employees to come back to the city. i wonder how much the working from home movement will remain entrenched and how much that will change the nature of cities , of commercial real estate. these are the big existential questions we cannot begin to answer until we start opening up more substantially. we will see.tom: we will do a data check. futures up 40, a little bit more than 40. a nice lift to the market starting with constructive news on china this morning. we have an important special coming up. our chief financial correspondent sonali basak in a special on moral hazard and on the extraordinary first six months of 2020. important conversations there to

reset for the second half of the year. markets lifting this morning. oil nicely above 40. stay with us. this is bloomberg. ♪

jonathan: from new york city for our audience worldwide, good

morning, good morning. "the countdown to the open" starts right now with equity futures nicely positive. we begin with the bait issue. a week of confusion over u.s. china trade relations kicked off by u.s. trade representative robert lighthizer. >> this issue of decoupling is a complicated one. we need to bring as much manufacturing back as we can. do i think you can sit down and decouple the united states economy with the chinese economy? no. that was a policy option years ago, i do not think it is reasonable option at this point. jonathan: that was the take from robert lighthizer. this is the take from the president. he wrote the following on twitter. "it was not robert lighthizer's fault and that perhaps i didn't make myself clear, but the u.s. certainly does maintain a policy